Services Agreement - Intelligroup Inc. and SeraNova Inc.
SERVICES AGREEMENT
This Services Agreement ("Agreement") is made and entered into as of the
1st day of January, 2000, by and between INTELLIGROUP, INC., a New Jersey
corporation ("ITIG") and SERANOVA, INC., a New Jersey corporation ("SERANOVA").
The parties agree to be legally bound as follows:
1. SERVICES. ITIG will provide SERANOVA with various types of services
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("Services") listed in Exhibit A, which is attached hereto and incorporated by
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reference. Such Exhibit A may be amended from time to time by written agreement
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between the parties. The Retained Employees (as defined in Section 5(a)(ii))
shall exclusively provide Services to SERANOVA and/or SERANOVA's clients as
directed by SERANOVA and pursuant to Exhibit A.
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2. TERMS OF AGREEMENT. This Agreement shall become effective on January 1,
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2000 (the "Effective Date"), and shall remain in full force and effect for a
period of one (1) year thereafter, unless earlier terminated pursuant to the
provisions of this Agreement. This Agreement shall automatically renew for
additional consecutive renewal terms of one (1) year unless either ITIG or
SERANOVA gives written notice of its intent not to renew the terms of this
Agreement sixty (60) days prior to the expiration of the then expiring term. The
initial one year term and any renewal period(s) thereafter shall collectively be
referred to as the "Term."
3. TERMINATION OF AGREEMENT.
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(a) This Agreement or any portion thereof may be terminated by either
party, for any reason, with thirty (30) days prior written notice
to the other party.
(b) This Agreement or any portion thereof may be terminated by either
party (the "non-defaulting party") if any of the following events
occur by or with respect to the other party (the "defaulting
party"): (i) the defaulting party commits a material breach of
any of its obligations hereunder and fails to cure such breach
within thirty (30) days of receipt of written notice from
non-defaulting party; or (ii) any insolvency of the defaulting
party, any filing of a petition in bankruptcy by or against the
defaulting party, any appointment of a receiver for the
defaulting party, or any assignment for the benefit of the
defaulting party's creditors; provided, however, that in the case
of any involuntary bankruptcy proceeding such right to terminate
shall only become effective if the proceeding is not dismissed
within sixty (60) days after the filing thereof.
Termination under this Section 3 or otherwise shall have no effect on the
respective obligations to make any payment required to be made pursuant to the
terms of this Agreement or any other obligation hereunder that survives the
termination of this Agreement. Neither party shall have any liability to the
other party for terminating the Agreement pursuant to this Section 3.
4. TRANSITION ASSISTANCE. Other than for termination by SERANOVA pursuant
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to Section 3(a) or by ITIG under Section 3(b)(ii), ITIG agrees to provide
SERANOVA with transition
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assistance for up to 180 days (or such shorter period as SERANOVA may elect)
after the expiration of the Term, or upon the termination of this Agreement by
either ITIG or SERANOVA. Transition assistance shall include the following: (i)
ITIG shall reasonably cooperate with SERANOVA or any relevant third party for
transferring of the Services to SERANOVA or any such third party that SERANOVA
selects; (ii) ITIG shall perform any new types of services, at a fee agreed upon
in writing by the parties, that are reasonably required to assist in
transferring of the Services to SERANOVA or any such third party that SERANOVA
selects; (iii) ITIG shall provide to SERANOVA, upon SERANOVA's reasonable
request, any records or other information relating to said Services; and (iv)
comply with SERANOVA's reasonable requests for assistance in engaging or
training another person or persons to provide the Services rendered by ITIG. So
long as ITIG is providing SERANOVA with transition assistance, SERANOVA shall be
obligated to provide compensation to ITIG pursuant to Exhibit A.
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5. INVOICING AND PAYMENTS.
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(a) (i) SERANOVA shall remit payment of the monthly fee set forth on
Exhibit A to ITIG on or before the first day of each month for
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the preceding month's Services. The first such payment shall
commence on the first day of the first month following the
Effective Date. Payment for any Services provided for a partial
month period preceding or following the initial payment shall be
prorated accordingly based on the number of days in a given
month. Notwithstanding any other provision of this Section 5,
ITIG shall make all payments to third parties as necessary to
ensure continued Services of the types contemplated in this
Agreement.
(ii) ITIG shall pay wages, provide benefits and make employer
contributions on behalf of the ITIG employees listed on Exhibit
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B, which is attached hereto and incorporated by reference
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("Retained Employees") until each Retained Employee resigns
his/her employment with ITIG or is transferred and becomes an
employee of SERANOVA (the "Transfer Date") and SERANOVA shall
reimburse ITIG for all such wages, benefits and employer
contributions paid by ITIG from the Effective Date until the
Transfer Date. ITIG's obligations to continue to pay wages,
provide benefits and make employer's contributions shall
terminate on each individual Retained Employee's Transfer Date or
upon termination or resignation of employment of such Retained
Employee. In light of SERANOVA's total control over the terms and
conditions of such Retained Employees, SERANOVA retains the right
to request the termination of any Retained Employee when
necessary and appropriate. All amounts payable to any Retained
Employee terminates under this Section 5(a)(ii) by virtue of such
termination, including but not limited to severance pay, accrued
wages, accrued vacation or leave pay, shall be reimbursed to ITIG
by SERANOVA. Such Exhibit B may be amended from time to time.
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(b) SERANOVA agrees to pay amounts equal to any Federal, state or
local sales, use, excise, privilege or other taxes or
assessments, however designated or levied, relating to any
amounts payable by SERANOVA to ITIG hereunder, this Agreement or
any Services provided by ITIG to SERANOVA pursuant hereto and any
taxes or amounts in lieu thereof paid or payable by ITIG,
exclusive of taxes based on ITIG's net income for the Services or
for any employees, agents or subcontractor of ITIG. ITIG will
invoice SERANOVA for any taxes payable by SERANOVA that are
required to be collected by ITIG pursuant to any applicable law,
rule, regulation or other requirement of law.
6. OBLIGATIONS.
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(a) Certain Information. SERANOVA shall provide to ITIG any
information needed by ITIG to perform the Services. If the
failure to provide such information renders the performance of
any requested Services impossible or unreasonably difficult, ITIG
may upon reasonable prior written notice to SERANOVA and without
incurring any liability refuse to provide such Services until
such time as SERANOVA has provided ITIG with the requisite
information.
(b) Further Assurances. During the term of this Agreement, ITIG and
SERANOVA shall use commercially reasonable efforts to: (i)
preserve their respective and mutual reputations and market
positions in strategic markets; (ii) promote their mutual
businesses and cause the retention and expansion of their
customers; (iii) refrain from taking any action which may
jeopardize any such customer relationship without the prior
written consent of the other party; and (iv) execute and deliver
any further legal instruments which may become necessary to
effect the purposes of this Agreement.
(c) Scope of Services. If ITIG and SERANOVA agree that it is
functionally impossible to continue to provide a Service under
this Agreement, or otherwise agree to eliminate or reduce one or
more Services provided hereunder, then ITIG shall discontinue
said Service at the time and in the manner agreed to by the
parties. In the event ITIG discontinues a Service provided
hereunder, SERANOVA's Service fee shall be prorated based on a
reasonable allocation of the costs as mutually agreed by the
parties. In the event that SERANOVA requires a reasonable
increase of the Services, ITIG shall increase the amount of
Services accordingly. The parties agree to negotiate in good
faith relating to ITIG's rendering of increased services to
SERANOVA and if the parties cannot agree on a price, ITIG has no
obligation to perform such increased services.
7. OWNERSHIP. All deliverables generated pursuant to the Services as set
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forth in Exhibit A ("Work Product") shall be deemed works made for hire under
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the applicable copyright laws, and that all Work Product shall be the sole and
exclusive property of SERANOVA. To the extent that any Work Product is not
considered a work for hire under the applicable copyright laws, ITIG hereby
assigns all of its rights, title or interest in the Work Product and in all
related
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patents, copyrights, trademarks, trade secrets, rights of priority and other
proprietary rights to SERANOVA. ITIG shall make full disclosure to SERANOVA of
all such Work Product, and reasonably assist and cooperate with SERANOVA, at
SERANOVA's expense, in all respects and will execute documents, give testimony,
and take all further acts requested by SERANOVA to obtain, maintain, perfect and
enforce for SERANOVA patent, copyright, trademark, trade secret or other legal
protection for the Work Product, as well as all reissues, renewals and
extensions thereof.
8. SUBCONTRACTING SERVICES. ITIG may, with the consent or approval of
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SERANOVA, subcontract certain Services, in whole or in part, provided to
SERANOVA pursuant to this Agreement. To the extent that ITIG subcontracts
certain or all Services, ITIG shall remain solely responsible to SERANOVA for
the execution and quality of said Services.
9. RECORD KEEPING.
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(a) Processing. Upon ten (10) days prior written notice from
SERANOVA, ITIG shall provide SERANOVA and/or its representatives
or any regulatory agency having jurisdiction reasonable access
during normal business hours to ITIG's facilities for the purpose
of performing audits or inspections of the business of ITIG
relating to the Services. ITIG shall provide any reasonable
assistance as may be required by SERANOVA and/or its
representatives or any regulatory agency having jurisdiction.
ITIG shall not be required to provide SERANOVA and/or its
representatives or any regulatory agency having jurisdiction
access to ITIG's data of ITIG's customer's data other than
SERANOVA. If any audit by an auditor designated by SERANOVA or
any regulatory agency having jurisdiction finds ITIG not in
compliance with any audit requirement relating to the Services,
ITIG shall meet with SERANOVA and the parties will agree on what
actions ITIG must take to be in compliance with the audit
requirements. SERANOVA shall be responsible for the cost of such
audit.
(b) Charges. Upon ten (10) days prior written notice from SERANOVA,
ITIG shall provide SERANOVA and/or its representatives reasonable
access during normal business hours to ITIG's facilities for the
purpose of performing audits or inspections to verify the
accuracy of the amounts charged by ITIG to SERANOVA for the
Services. If, as a result of such audit, it is determined that
ITIG has overcharged SERANOVA, SERANOVA shall notify ITIG of the
amount of such overcharge and ITIG shall promptly pay to SERANOVA
the amount of the overcharge, plus interest of one percent (1%)
per month, but in no event to exceed the highest lawful rate of
interest, calculated from the date of receipt by ITIG of the
overcharged amount until the date of payment to SERANOVA. In
addition, in the event any such audit reveals an overcharge to
SERANOVA by ITIG of five percent (5%) or more, ITIG shall
reimburse SERANOVA for cost of such audit.
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10. WARRANTY.
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(a) ITIG represents and warrants that during the performance of and
for a period of sixty (60) days after performance, the Services
will be provided in a professional and workmanlike manner in
accordance with industry standards and the Services will
materially conform to Exhibit A. In the event the Service fails
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to conform to the foregoing warranties in any material respect,
the sole and exclusive remedy of SERANOVA, and ITIG's liability,
as a result thereof will be for ITIG, at its expense, to use its
commercially reasonable efforts to cure or correct such failure
as soon as reasonably practical or refund any monies paid by
SERANOVA to ITIG for the nonconforming portion of the Services.
(b) ITIG represents and warrants that to its knowledge, the rendering
of Services will not infringe on any US patents, copyrights or
trademarks.
(c) Each party represents and warrants that it shall comply with all
applicable federal, state and local laws and regulations
applicable to the Services and shall obtain all applicable
permits, registrations and licenses required of it in connection
with its obligations under this Agreement.
(d) EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, ITIG DOES NOT
MAKE ANY REPRESENTATION OR WARRANTY OF ANY KIND, WHETHER SUCH
WARRANTY BE EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR ANY
WARRANTY FROM COURSE OF DEALING OR USAGE OF TRADE.
11. LIMITATION OF LIABILITY. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE
OTHER PARTY FOR ANY SPECIAL, EXEMPLARY, INDIRECT, INCIDENTAL, CONSEQUENTIAL OR
PUNITIVE DAMAGES OF ANY KIND OR NATURE WHATSOEVER (INCLUDING, WITHOUT
LIMITATION, LOST REVENUES, PROFITS, SAVINGS OR BUSINESS), WHETHER IN AN ACTION
BASED ON CONTRACT, WARRANTY, STRICT LIABILITY, TORT (INCLUDING, WITHOUT
LIMITATION, NEGLIGENCE) OR OTHERWISE, EVEN IF SUCH PARTY HAS BEEN INFORMED IN
ADVANCE OF THE POSSIBILITY OF SUCH DAMAGES OR SUCH DAMAGES COULD HAVE BEEN
REASONABLY FORESEEN BY SUCH PARTY. In no event shall either party's aggregate
liability to the other party exceed the total fees paid by SERANOVA to ITIG for
the twelve (12) month period immediately preceding the event that gave rise to
the liability, whether such liability is based on an action in contract,
warranty, strict liability or tort (including, without limitation, negligence)
or otherwise. Each party's entire liability under this Agreement shall be as set
out in this Section 11. The parties have agreed that the limitations specified
in this Section 11 will survive and apply even if any limited remedy specified
in this Agreement is found to have failed of its essential purpose.
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12. INDEMNIFICATION.
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(a) Indemnity by SERANOVA. SERANOVA shall indemnify ITIG from and
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defend ITIG against, any liability or expenses (including
reasonable attorneys' fees) arising out of or relating to any
claim, loss, damage, cost, liability, or expense ("Claim"):
1. Relating to the employment or termination thereof of any
Retained Employee;
2. Relating to (a) a violation of Federal, state, or other laws
(including common law) or regulations, including but not
limited to a violation of Federal, state, or other laws
(including common law) or regulations for the protection of
persons or members of a protected class or category of
persons by SERANOVA, its employees, or agents, (b) sexual
discrimination or harassment by SERANOVA, its employees, or
agents, and (c) work-related injury except as maybe covered
by SERANOVA's worker's compensation or death caused by
SERANOVA, its employees, or agents;
3. Relating to amounts, including taxes, interest, and
penalties, assessed against ITIG which are the obligations
of SERANOVA pursuant to Section5(b); and
4. To the extent directly related to personal injury or
tangible personal property, damage resulting from any
Retained Employee's (prior to such Retained Employee's
Transfer Date but after SERANOVA becomes a publicly held
entity) and SERANOVA's negligent acts or omissions.
(b) Indemnity by ITIG. ITIG shall indemnify SERANOVA from and defend
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SERANOVA against, any liability or expenses (including reasonable
attorneys' fees) arising out of or relating to any Claim:
1. Relating to (a) a violation of Federal, state, or other laws
(including common law) or regulations, including but not
limited to a violation of Federal, state, or other laws or
regulations for the protection of persons or members of a
protected class or category of persons by ITIG, its
employees, or agents, (b) sexual discrimination or
harassment by ITIG, its employees, or agents, and (c )
work-related injury except as may be covered by ITIG's
worker's compensation or death caused by ITIG, its
employees, or agents;
2. Relating to amounts, including taxes, interest, and
penalties, assessed against SERANOVA which are the
obligations of ITIG pursuant to Section 5(b);
3. Relating to ITIG's non-compliance with legal or regulatory
requirements applicable to ITIG; and
4. To the extent directly related to personal injury or
tangible personal property damage resulting from ITIG's
negligent acts or omissions excluding the acts or omissions
of any Retained Employees (prior to such Retained Employee's
Transfer Date but after SERANOVA becomes a publicly held
entity).
(c) The party seeking indemnification under any provision of this
Agreement shall promptly notify the party against whom the
indemnification is sought in writing of any claim for
indemnification, specifying in detail the basis of such claim,
the
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facts pertaining thereto and, if known, the amount, or an
estimate of the amount, of the liability arising therefrom;
provided however, that failure to give such notice shall not
affect the indemnification provided hereunder except to the
extent that the indemnifying party can demonstrate actual
monetary prejudice as a direct result of such failure. The
indemnified party shall provide to the indemnifying party as
promptly as practicable thereafter all information and
documentation necessary to support and verify the claim asserted
and the indemnifying party shall be given reasonable access to
all books and records in the possession or control of the
indemnified party or any of its affiliates which the indemnifying
party reasonably determines to be related to such claim.
(d) The indemnifying party shall have sole control over the defense
and/or settlement of any claim and the indemnified party will, at
the indemnifying party's sole expense, provide reasonable
assistance to the indemnifying party. If the indemnified party
takes any overt action that unreasonably compromises the
indemnifying party's defense or settlement of any claim, the
indemnifying party shall be relieved of its indemnification
obligations for such particular claim.
13. PARTIES' RELATIONSHIP.
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(a) Independent. The parties are independent entities with each
having sole authority and control of the manner of, and is
responsible for, its performance of this Agreement. This
Agreement does not create or evidence a partnership or joint
venture between the parties. Neither party has the right or
authority to enter into any contract, warranty, guaranty or other
undertaking in the name or for the account of the other party, or
to assume or create any obligation or liability of any kind,
express or implied, on behalf of the other party, or to bind the
other party in any manner whatsoever, or to hold itself out as
having any right, power or authority to create any such
obligation or liability on behalf of the other or to bind the
other party in any manner whatsoever (except as otherwise
provided by this Agreement or as to any other actions taken by
either party at the express written request and direction of the
other party).
b) Employees. Except as otherwise described herein, for the purposes
of this Agreement each party is solely responsible for its own
employees or agents, including the actions or omissions and the
payment of compensation, taxes and benefits of those employees
and agents.
(c) Access. To the extent reasonably required for SERANOVA's
personnel to perform their job functions, ITIG shall provide
SERANOVA's personnel with reasonable access to its equipment,
office facilities and any other areas and equipment for which
SERANOVA has provided compensation to ITIG under the terms of
this Agreement. In addition, the employees of SERANOVA shall have
reasonable access to those employees of ITIG who perform any of
the Services.
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(d) Non Solicitation. During the Term hereof and for a period of
twelve (12) months thereafter, neither party shall, directly or
indirectly, solicit for employment or employ, or accept services
provided by, any employee, officer or independent contractor of
the other party who performed any work in connection with or
related to the Services without the prior written consent of the
other party and such consent shall not be unreasonably withheld.
14. DISPUTE RESOLUTION PROCEDURE. Except as otherwise stated in this
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Agreement, the parties shall resolve all disputes in accordance with the
following procedure:
(a) Each party shall promptly negotiate in good faith to resolve all
disputes, controversies or claims arising out of or relating to
this Agreement or the performance hereunder (a "Dispute"). In the
event that the parties cannot resolve the Dispute in such manner,
they shall immediately refer the Dispute to each party's CFO or
such other senior executives as may be mutually agreed upon by
the parties from time to time. If such executives do not agree
upon a decision within a reasonable amount of time after referral
of the Dispute to them (but in no event more than thirty (30)
days from the date the party that determines there is a Dispute
becomes aware of such dispute) they shall submit the Dispute to
the following binding arbitration procedures:
1. Any Dispute shall be submitted to binding arbitration, in
accordance with the dispute resolution procedures specified in
this Section 14. If any of these procedures are determined to be
invalid or unenforceable, the remaining procedures shall remain
in effect and binding on the parties to the fullest extent
permitted by law.
2. The arbitration shall be conducted in accordance with the
procedures specified in this Section 14 and the Arbitration Rules
for Professional Accounting and Related Services Disputes of the
AAA ("AAA Rules"). In the event of a conflict, the provisions of
this Section 14 shall control. The arbitration shall be conducted
before a panel of three arbitrators, regardless of the size of
the Dispute, to be selected as provided in the AAA Rules.
3. Any issue concerning the extent to which any Dispute is
subject to arbitration, or concerning the applicability,
interpretation, or enforceability of these procedures, including
any contention that all or part of these procedures are invalid
or unenforceable, shall be governed by the Federal Arbitration
Act and resolved by the arbitrators. No potential arbitrator may
serve on the panel unless first agreeing in writing to abide and
be bound by these procedures. The arbitrators may not award
non-monetary or equitable relief of any sort. They shall have no
power to award damages inconsistent with the Agreement or
punitive damages or any other damages not measured by the
prevailing party's actual damages, and the parties expressly
waive their right to obtain such damages in arbitration or in any
other forum. In no event, even if any other portion of these
procedures is adjudged invalid or unenforceable, shall the
arbitrators have power
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to make an award or impose a remedy that could not be made or
imposed by a court deciding the matter in the same jurisdiction.
4. No discovery shall be permitted in connection with the
arbitration unless expressly authorized by the arbitration panel
upon a showing of substantial need by the party seeking
discovery. All aspects of the arbitration shall be treated as
confidential. Neither the parties nor the arbitrators may
disclose the existence, content or results of the arbitration,
except as necessary to comply with legal or regulatory
requirements. Before making any such disclosure, a party shall
give written notice to all other parties and afford such parties
a reasonable opportunity to protect their interest. The result of
the arbitration shall be a final decision that is binding on the
parties, and judgment on the arbitrators' award may be entered in
any court having jurisdiction.
15. CONFIDENTIALITY.
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(a) SERANOVA and ITIG shall each (i) hold the Confidential
Information (as defined below) of the other in trust and
confidence and avoid the disclosure or release thereof to any
other person or entity by using the same degree of care as it
uses to avoid unauthorized use, disclosure, or dissemination of
its own Confidential Information of a similar nature, but not
less than reasonable care, and (ii) not use the Confidential
Information of the other party for any purpose whatsoever except
as expressly contemplated under this Agreement. Each party shall
disclose the Confidential Information of the other only to those
of its employees having a need to know such Confidential
Information and shall take all reasonable precautions to ensure
that its employees comply with the provisions of this Section 15.
(b) The term "Confidential Information" shall mean any and all
information or proprietary materials (in every form and media)
not generally known in the relevant trade or industry and which
has been or is hereafter disclosed or made available by either
party (the "disclosing party") to the other (the "receiving
party") in connection with the efforts contemplated hereunder,
including (i) all trade secrets, (ii) existing or contemplated
products, services, designs, technology, processes, technical
data, engineering, techniques, methodologies and concepts and any
information related thereto, and (iii) information relating to
business plans, sales or marketing methods and customer lists or
requirements.
(c) The obligations of either party under this Section 15 will not
apply to information that the receiving party can demonstrate (i)
was in its possession at the time of disclosure and without
restriction as to confidentiality, (ii) at the time of disclosure
is generally available to the public or after disclosure becomes
generally available to the public through no breach of agreement
or other wrongful act by the receiving party, (iii) has been
received from a third party without restriction on disclosure and
without breach of agreement or other
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wrongful act by the receiving party, (iv) is independently
developed by the receiving party without regard to the
Confidential Information of the other party, or (v) is required
to be disclosed by law or order of a court of competent
jurisdiction or regulatory authority, provided that the receiving
party shall furnish prompt written notice of such required
disclosure and reasonably cooperate with the disclosing party, at
the disclosing party's cost and expense, in any effort made by
the disclosing party to seek a protective order or other
appropriate protection of its Confidential Information.
16. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon, and shall
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inure to the benefit of, the parties hereto and their respective successors and
permitted assigns. This Agreement may not be assigned by either party hereto
without the prior written consent of the other party except ITIG may, upon prior
written notice to SERANOVA (but without any obligation to obtain the consent of
SERANOVA), assign this Agreement or any of its rights hereunder to any affiliate
of ITIG, or to any entity who succeeds (by purchase, merger, operation of law or
otherwise) to all or substantially all of the capital stock, assets or business
of ITIG, if such entity agrees in writing to assume and be bound by all of the
obligations of ITIG under this Agreement.
17. NO THIRD-PARTY BENEFICIARIES. Nothing expressed or implied in this
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Agreement shall be construed to give any person or entity other than the parties
any legal or equitable rights under this Agreement.
18. WAIVERS. No term or provision hereof shall be deemed waived and no
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breach excused unless such waiver or consent shall be in writing and signed by
an authorized representative of the party claiming to have waived or consented.
No consent by either party to, or waiver of, a breach by the other, whether
express or implied, shall constitute a consent to, waiver of, or excuse for any
different or subsequent breach.
19. NOTICES. All notices given in connection with this Agreement shall be in
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writing and transmitted by (i) hand delivery; (ii) courier delivery; (iii) U.S.
certified mail, return receipt requested, postage prepaid; or (iv) telecopier to
the addressed listed below. Delivery of said notices shall be deemed given upon
the date of (a) receipt of courier delivery; (b) certified mail return receipt
is signed or delivery is rejected; or (c) receipt of written confirmation of
telecopier transmittal.
If to ITIG: Intelligroup, Inc.
499 Thornall Street
Edison, New Jersey 08837
Attn: President
Fax No.: (732) 362-2100
If to SERANOVA: SeraNova, Inc.
499 Thornall Street
Edison, New Jersey 08837
Attn: President
Fax No.: (732) 362-2100
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20. FORCE MAJEURE. No delay or failure of a party to perform any of
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its obligations, other than payment obligations, under this Agreement due to
causes beyond its reasonable control shall constitute a breach of this Agreement
or render that party liable for that delay or failure. Causes beyond a party's
reasonable control include, but are not limited to: (i) events or circumstances
that the party, even though using all, reasonable efforts, is unable to prevent
or overcome; or (ii) labor disputes, strikes, or other similar disturbances,
acts of God, utilities or communications failures, acts of the public enemy,
riots, insurrections, sabotage or vandalism.
21. SEVERABILITY. The invalidity, illegality or unenforceability of any
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provision in this Agreement shall not in any way affect the validity, legality
or enforceability of any other provision of this Agreement. This Agreement shall
be reformed and construed in all respects as if such invalid or unenforceable
provision had never been in the Agreement and such provision shall be reformed
so that it will be valid, legal and enforceable to the extent possible.
22. GOVERNING LAW, VENUE AND JURISDICTION. This Agreement shall be
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construed in accordance with and governed by the laws of the State of New
Jersey, without regard to its conflict of laws principles. Subject to Section
14, the parties consent to jurisdiction and venue in the state courts of
Middlesex County, New Jersey, or if there is exclusive federal jurisdiction, the
U.S. District Court for the District of New Jersey, shall have exclusive
jurisdiction and venue over any dispute arising out of this Agreement.
23. HEADINGS. Headings in this Agreement are included for convenience of
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reference only and do not constitute a part of this Agreement for any other
purpose.
24. ENTIRE AGREEMENT. This Agreement constitutes the entire understanding
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between the parties with respect to the subject matter contained herein and
supersedes all prior communications, representations and agreements. It shall
not be varied except by a modification in writing which is duly executed by
authorized representatives of the parties subsequent to the date first appearing
herein
25. COUNTERPARTS. This Agreement may be executed in counterparts, each of
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which shall be deemed an original and of equal force and effect.
26. INSURANCE. ITIG and SERANOVA (after SERANOVA becomes a publicly held
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entity) agree to maintain insurance in accordance with the following:
o Workers Compensation & Employer's Liability:
As required under the law of the state in which the work is
performed with each party's liability limit not less than
$500,000 per occurrence/annual aggregate.
o Commercial General Liability:
Covering all operations of each party including product and
completed operations and contractual liability against claims for
personal bodily injury and property damage with a liability limit
not less than $1,000,000 per occurrence/annual aggregate.
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o Errors & Omission Insurance:
Covering loss or damage arising out of negligent acts or errors
or omissions which arise from professional Services provided by
ITIG under this Agreement and any services provided by SERANOVA
(using the Retained Employees after SERANOVA becomes a publicly
held entity but prior to such employee's Transfer Date) with
limits no less than $1,000,000 per occurrence.
Such insurance coverage as is required under this Agreement shall be in
form and with insurance carriers licensed to do business in the state
where the services are provided, unless otherwise provided herein. As
evidence of said coverage, ITIG shall forward Certificates of Insurance,
or copies of insurance policies, to SERANOVA, which shall contain a
provision to endeavor to notify SERANOVA in writing of a cancellation or
nonrenewal of said coverages not less than thirty (30) days before its
effective date. The foregoing statements as to the types and limits of
insurance coverage to be maintained by ITIG, is not intended to and
shall not in any manner limit or qualify the liabilities and obligations
otherwise assumed by ITIG pursuant to this Agreement, including but not
limited to the provisions concerning indemnification.
27. PUBLICITY. Neither party shall use the name of the other party in any
---------
materials, statements or press releases without the prior written consent of the
other party.
IN WITNESS WHEREOF, this Agreement has been executed effective as of the
date first above written.
WITNESSES INTELLIGROUP, INC.
-----------------------------
BY: /s/ Ashok Pandey
----------------------------- -----------------------------
Ashok Pandey
Co-Chief Executive Officer
SERANOVA, INC.
-----------------------------
BY: /s/ Raj Koneru
----------------------------- -----------------------------
Raj Koneru
Chairman, Chief Executive Officer
and President
- 12 -
<PAGE>
EXHIBIT A
DESCRIPTION OF SUPPORT SERVICES AND APPLICABLE FEES
INFORMATION SYSTEMS & SUPPORT
-----------------------------
Monthly Access and Support Fee for SAP system:
----------------------------------------------
o Fixed charge of $4,000 per month;
o Includes application support and consultation;
o Does not include enhancement or modification of the underlying software or
configuration, except as needed to correct for system malfunction or
programming "bugs".
PC Applications and Hardware Support Services/Procurement:
----------------------------------------------------------
o Fixed monthly charge of $10,000 for January; $8,000 per month thereafter;
o Support for desktop systems and network management applications for Edison,
N.J. location
o Ordering, receiving and configuring of new PC's and Laptops as needed
(exclusive of actual cost of hardware and software components).
o Continued access and support for Lotus Notes e-mail system currently
installed;
o Additional charges may be invoiced for the actual cost incurred to extend or
add user licenses should these be required (based upon increases in
registered users over baseline number, determined as of December 31, 1999).
The parties acknowledge that Intelligroup has entered into contractual
relationships with various software vendors for use of the software.
Intelligroup will permit SeraNova a right to use the software or provide
services to SeraNova to the extent Intelligroup is permitted under its
applicable agreements with the software vendors. SeraNova will take all
reasonable actions requested by Intelligroup, so that SeraNova may use the
software or receive services from Intelligroup. Upon SeraNova becoming a
publicly held entity, SeraNova, at its sole cost and expense, may have to enter
into separate agreements with such software vendors and may no longer have the
right to use the software or receive services from Intelligroup.
GENERAL ADMINISTRATIVE SUPPORT
------------------------------
Mail Delivery & Facilities Management
-------------------------------------
o Fixed charge of $3,000 per month, adjustable upon mutual agreement to
reflect changes in usage or underlying costs to Intelligroup;
o Monthly charge includes handling and distribution of mail and other
deliveries, incidental office supplies, copy machine usage, and general
facilities management;
o Additional charges will be invoiced for actual costs of "expressmails"
(including but not limited to Federal Express, U.S. Postal Service Exerts
Mail, Airborne Express);
o Additional charge of $1,000 per month for postage, adjustable upon mutual
agreement to reflect changes in usage or underlying costs to Intelligroup;
Receptionist
------------
o Fixed charge of $1,700 per month.
<PAGE>
Human Resources
---------------
o Fixed charge of $2,500 per month, adjustable upon mutual agreement to
reflect changes in underlying employee mix;
o Administrative support related to 401(k) Plans, applicable medical benefit
plans, employee manual;
o Employee orientation and hiring support will be invoiced at a rate of $100
per new "in-house" employee hired (covers such incidentals as key cards,
name plates, etc
Billing Support
---------------
o Fixed monthly charge of $1,000;
o Provides assistance with setting up and transferring A/R, and Billing
functions from Intelligroup;
o Covers the cost of continued invoice processing by Intelligroup required to
clear historical amounts.
Payroll Support
---------------
o Fixed charge of $1,500 per month for the months of January through March,
2000; then at a rate of $500 per month thereafter;
o Provides administrative and processing assistance for the months of January
through March, 2000, including assistance with quarterly tax reporting;
o Also provides for on-going advisory support in connection with payroll
processing;
o External charges (such as Ceridian Payroll Service) are to be directly
billed to SeraNova.
Immigration
-----------
o Per case charge of $100 to cover administrative costs and access to
Immigration Staff;
o All external charges, including but not limited to legal (Fragomen) and
I.N.S. fees are to be directly billed to SeraNova.
Other Support and Administrative Costs
--------------------------------------
The above assumes that certain external costs will be directly invoiced to
SeraNova. In the event that any such costs, directly attributable to SeraNova,
are invoiced by a third party to Intelligroup, these will be recoverable by
Intelligroup upon presentment of such costs to SeraNova in the form of an
invoice or other written request for payment (which will detail the costs and
purposes for such costs).
Certain other costs may be incurred by Intelligroup on behalf of both parties,
which may include but are not be limited to (i) cost of general liability,
property and casualty, and other business insurance coverages (prior to SeraNova
becoming a publicly held entity); and (ii) costs of outside retained recruiting
firms. Intelligroup may recover a proportionate share of such costs from
SeraNova upon presentment to SeraNova in the form of an invoice or other written
request for payment (which will detail the costs and purposes for such costs).
Such proportion will be determined by mutual agreement of the parties.
<PAGE>
INTELLIGROUP MONTHLY BILLING SCHEDULE FOR 2000
FOR CHARGES UNDER EXHIBIT A OF THE SERVICES
AGREEMENT
<TABLE>
<CAPTION>
Jan-00 Feb-00 Mar-00 Apr-00 May-00 Jun-00 Jul-00 Aug-00
------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Monthly Fixed Charges
Information Systems and Support
SAP systems access and support $ 5,500 $ 5,500 $ 5,500 $ 5,500 $ 5,500 $ 5,500 $ 5,500 $ 5,500
PC applications and H/W support $11,000 $11,000 $11,000 $11,000 $11,000 $11,000 $11,000 $11,000
General Administrative Support
Mail room and facilities $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000
Postage $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000
Receptionist $ 1,700 $ 1,700 $ 1,700 $ 1,700 $ 1,700 $ 1,700 $ 1,700 $ 1,700
H/R support $ 3,500 $ 3,500 $ 3,500 $ 3,500 $ 3,500 $ 3,500 $ 3,500 $ 3,500
Billing support $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000
Payroll support $ 1,500 $ 1,500 $ 1,500 $ 500 $ 500 $ 500 $ 500 $ 500
--------------------------------------------------------------------------------------
Total Fixed Charges for Services $28,200 $28,200 $28,200 $27,200 $27,200 $27,200 $27,200 $27,200
======================================================================================
Sep-00 Oct-00 Nov-00 Dec-00
------ ------ ------ ------
Monthly Fixed Charges
Information Systems and Support
SAP systems access and support $ 5,500 $ 5,500 $ 5,500 $ 5,500
PC applications and H/W support $11,000 $11,000 $11,000 $11,000
General Administrative Support
Mail room and facilities $ 3,000 $ 3,000 $ 3,000 $ 3,000
Postage $ 1,000 $ 1,000 $ 1,000 $ 1,000
Receptionist $ 1,700 $ 1,700 $ 1,700 $ 1,700
H/R support $ 3,500 $ 3,500 $ 3,500 $ 3,500
Billing support $ 1,000 $ 1,000 $ 1,000 $ 1,000
Payroll support $ 500 $ 500 $ 500 $ 500
--------------------------------------------------------------------------------------
Total Fixed Charges for Services $27,200 $27,200 $27,200 $27,200
============================================
</TABLE>
Variable ("Per drink") charges
------------------------------
H/R support - $100 per new in-house hire
Immigration support - $100 per case
INTELLIGROUP MONTHLY BILLING SCHEDULE
FOR RENT AND UTILITIES CHARGES UNDER THE SPACE SHARING AGREEMENT
<TABLE>
<CAPTION>
Jan-00 Feb-00 Mar-00 Apr-00 May-00 Jun-00 Jul-00 Aug-00 Sep-00 Oct-00 Nov-00 Dec-00
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
<PAGE>
EXHIBIT B
RETAINED EMPLOYEES
<TABLE>
<CAPTION>
NAME ID# NAME ID#
---- --- ---- ---
<S> <C> <C> <C>
Badola, Anil # 2280 Natarajan, Sambamoorthy # 228
Balakrishnan, Sridhar # 2036 Nath, Mohan # 706
Boghra, Arunkumar # 479 Padmala, Srinivas Rao # 1816
Chandran, Karthikeyan # 2010 Palvai, Sreedhar # 1898
Dasari, Nageswararao # 2251 Parekh, Hitesh # 1683
Desai, Sheetal # 2221 Pavuluri, Kiran # 1509
Errangutla, Mahesh # 606 Prasani, Vineet Rayroth # 159
Gadre, Veerdhaval # 761 Rajagopal, Raghu # 326
Gaur, Harish # 1970 Ramachandran, Aravind # 1554
Gorde, Ajay # 285 Ramaswamy, Prakash # 2300
Guduru, Vidyasaagar # 2298 Rao, Shashikant # 1859
Kalapatapu, Rama Sastry # 827 Ray, Pragnesh # 1813
Kalvit, Hemant # 910 Reddy, Venugopal # 97
Kanyan, Mathew # 1847 Roche, Conrad # 2290
Kelwalkar, Anil Balakrishna # 1931 Roy, Ashok # 1596
Keswani, Haresh # 1635 Sahoo, Rabi Narayan # 1877
Kolukuluri, Trivikram # 808 Sahu, Gajendra Kumar # 2163
Koneru, Padma # 628 Sawant, Sudhir # 535
Krishnan, Vilayanur P. # 2155 Sheth, Tushar # 1592
Kumar, Manish # 2128 Sindhwani, Manesh # 1846
Kumar, Raj # 629 Soman, Kshitish # 708
Kuttalingam, Vannamuthu # 1524 Srinivasan, Girish # 1958
Lanka , Kutumba # 413 Srinivasan, Sridhar # 562
Madhavi, Nandyala # 767 Suki, Geetanjali # 2023
Madhineni, Madhukar # 684 Sunkam, Sreehari # 638
Mathur, Praveen # 1932 Susarla, Bharat # 1710
Mohammad, Asif # 348 Thirugnanam, Gomathi # 1963
Mopati, Krishna # 369 Vedavyas, Balram # 725
Morarji, Dhirendra # 1522 Wahi, Saurabh # 181
Mysore, Prashanth # 1924 Zentelis , Nicolas # 1927
Nagwekar, Suraj # 1508 Kanthi, Hanumanth not assigned
Nair, Rajan # 732 Guntupalli, Bharat not assigned
Nallapaneni, Netaji # 831 Aruminathan, William S not assigned
Narne, Aravind # 2327 Sharan, Jaya not assigned
</TABLE>